SR2002/NI
15 July 2002
New resources for Northern Ireland Executive
Northern Ireland today received a further boost as the Chancellor unveiled substantial new resources for the Northern Ireland Executive which means that spending in Northern Ireland will rise by £0.4 billion in 2003-04, £0.76 billion in 2004-05 and £1.2 billion in 2005-06 compared to 2002-03. This means that the Northern Ireland Executive’s budget will grow by an average annual rate of 3.3 per cent over the next three years. The Government is working in partnership with the Northern Ireland Executive to increase opportunity for all in Northern Ireland, remove barriers to growth ensure that all the people of Northern Ireland are able to share in the increased prosperity that the devolution partnership between the Government and the Northern Ireland Executive is delivering.
Welcoming the settlement the Secretary of State for Northern Ireland, Dr John Reid, said today:
“I am very pleased with the settlement for Northern Ireland announced today by the Chancellor. It represents an important boost to the public services in Northern Ireland, made possible by our successful handling of the economy and public finances. It is now for the Northern Ireland Executive to translate this into the best possible public services for the people of Northern Ireland.
“The spending review demonstrates the Government’s commitment to provide an opportunity for everyone to fulfil their potential through education and employment; to promote a fair and inclusive society in which communities are healthy and secure; and facilitates sustained economic growth and effective cooperation with our European and international partners.
“The settlement will help enable the Northern Ireland Executive to deliver improved services and prosperity for all the people of Northern Ireland in partnership with the United Kingdom Government. The settlement helps the government continue to meet its commitment to make a success of the EU Peace programme in Northern Ireland and builds on the platform for peace and prosperity already provided by the additional borrowing powers and investment announced by the Chancellor in May.”
The Northern Ireland Executive has freedom to make its own spending decisions within the overall totals on functions under their control in response to local priorities. The Northern Ireland Executive will make its own announcements in due course about their detailed spending plans.
The changes in the Northern Ireland Executive’s budget in the spending review has been linked to changes in spending plans of United Kingdom Government departments by the Barnett formula. The formula gives Scotland, Wales and Northern Ireland a population based share of planned changes in comparable spending in England. The Assembly will also receive extra funds to enable it to continue to cover the increase in EU receipts in respect of the European Union Peace programme in Northern Ireland.
Notes for editors
1. The Northern Ireland Executive Departmental Expenditure Limits for the next three years are £6,813 million, £7,179 million and £7,626 million respectively. These amounts represent increases over the 2002-03 limit of £488 million, £853 million and £1,301 million for each year of the Spending Review and include increases announced in the Budget. They represent a real terms annual average increase in provision over the next three years of 3.3 per cent.
| £ million | 2002-03 | 2003-04 | 2004-05 | 2005-06 |
| Northern Ireland Executive | ||||
| Resource Budget | 6,167 | 6,486 | 6,796 | 7,208 |
| Capital Budget | 342 | 423 | 483 | 523 |
| Total Departmental Expenditure Limit¹ | 6,418 | 6,813 | 7,178 | 7,626 |
¹Full resource budgeting basis, net of depreciation. | ||||
²Consistent with previous control basis. | ||||
2. The budgets have been set in resource terms consistent with those of United Kingdom Government departments. The increases have been largely determined on the basis of the Barnett formula. The general principles for determining budgets are set out in the Statement of Funding Policy for the devolved administrations which is being published today. The Barnett formula ensures that Northern Ireland receives a population-based share of changes in comparable spending in England. The settlement also provides provision to cover in full the increase in EU Peace funds receipts.
3. The devolved administrations’ budgets continue to be determined within the United Kingdom framework of public expenditure control. Responsibility for United Kingdom public expenditure allocation remains with the Treasury. Once overall public expenditure budgets have been determined, the devolved administrations have freedom to make their own spending decisions within the overall totals on functions under their control in response to local priorities. The devolved administrations will make their own announcements in due course about their detailed spending plans.
4. The Government conducted a comprehensive review of public services - the Comprehensive Spending Review - in 1998. The 2000 Spending Review built on this by setting targets and allocating resources for the three years to 2003-04. The 2002 Spending Review revises these plans for 2003-04 and outlines new plans for 2004-05 and 2005-06.
5. For further details please contact the Northern Ireland Office Press Office on 07693 654321 (Duty Officer 07884 490658) or visit the Northern Ireland Office website: www.nio.gov.uk.